The numbers about immigration that fuel Trump’s campaign

Summary: Trump serves a common and vital role in US politics, introducing popular issues that the elites of both parties suppress. Such as immigration. Here are some of the numbers that show why many Americans worry about the high rate of immigration (but not our elites, who love the cheap workers and politically passive voters). {1st of 2 posts today.}

Photographer: Victor J. Blue/Bloomberg

Cui bono from the recovery?

This graph and the accompanying analysis from the ECRI shows that the employment to population ratio (E/P) for those with less than a high school diploma (orange line) hit bottom in 2011. Since then it has regained almost two-thirds of the losses in the great recession. But the E/P ratio for high school and college graduates (90% of adults; purple line) has not recovered since the recessionary losses. The new jobs have gone to the least educated — and so the lowest-paid — workers.

Combined with the income gains to the top 10%, we have a recovery that has done little for most Americans. No amount of cheer-leading by Team Obama and Wall Street can change that.

Who are those low education workers that are getting jobs?

This graph shows the percent of workers 16+ years old who are foreign born — not seasonally adjusted (NSA) from the monthly Current Population Survey. I don’t know how well it tracks illegal aliens. The share of jobs held by foreign-born workers has steadily risen during the recovery. Let’s look at the numbers from the trough of the jobs recession in January 2010 (NSA).

12,419,000 jobs created.

3,824,000 of those went to foreign-born (31% of total).

8,595,000 went to native-born (69% of total).

Result: foreign born workers (15% of all workers) got 31% of the new jobs.

Foreign born workers are a diverse lot. Some have lived in the US 60 years; some just arrived. Some have PhD’s; some lack high school degrees. The median weekly earnings for full-time foreign-born workers is only 81% of that for native-born workers (per the CPS). The gains by low-wage foreign-born workers are probably strongest for recent immigrants, but we don’t have the data to see that.

Here we see one of the sources of our discontent, as immigration helps keeping US wages low, especially for workers at the bottom of the ladder. More broadly, the rosy jobs numbers don’t well reflect the experience of many Americans. Nor do the record profits of corporations, nor the lavish pay of their senior managers.

The coming rebellion against Immigration

America absorbed high rates of immigration during the rapid growth of the 19thC, with the frontier (mostly conquests from Mexico and Native Americans) providing a safety value. Growth slowed for many reasons after the “closing of the frontier” around 1890. Per capita real US GDP has grown at roughly 2%/year since 1870. But in the 17 years before 1924 growth was only 1.2%/yr.

The post-WWII boom plus low rates of immigration created the middle class, and eventually allowed our elites to slowly open the borders. Wages stagnated as the number of foreign born workers rose after 1970 (other factors contributed, of course). Worse, since 1999 per capita GDP growth slowed to roughly 1%/year. Just as we’re repeating the Gilded Age (wealth and power concentrating in the 1%), we’re repeating the growth in social tensions from immigration of the early 20th C.

Slowly opposition has arisen to this open almost open borders policy, one of the core policies of our ruling elites. Immigrants pose an economic threat to many Americans. Many consider them a threat to American culture.

Until the 2008 crash and the great recession, the bipartisan consensus on open borders kept debate about this on the political fringes. Economic stress forced some action to limit illegal immigration. Now Trump has brought it into the center ring of public debate. How much support will immigration restrictions get from other politicians and the public? How strongly will our elites resist? We can only guess at how this will play out, and the results.

Polls about immigration

A substantial fraction of Americans object to this remaking of America. The polls vary quite bit, and with results that appear to depend on the wording of the question. But there is a core of approximately one-third unhappy about current levels of immigration, and a larger fraction opposed to large flows of illegal immigration. See the polls here, and Gallup’s here.

Once again it takes an outsider to give a voice to a group of disenfranchised voters. Watch our political gurus squirm as this challenge by the proles to their patrons’ power!

I do prefer to make a distinction between legal and illegal. A legal immigrant enters a country pursuant to existing laws.

I’ve been “foreign born” since I was 14 years old, but I never had illegal alien status. In my case I landed in a refugee camp in Spain financed by the UN, was taken to fill out a bunch of papers, and had to wait almost a year before they found me acceptable to be taken in by a U.S. family. I had to go through a medical exam, an interview by a U.S. Consular official, and landed in NY at 15. As it turns out I was really lucky, I landed in a Jewish neighborhood where my chess skills where appreciated.

The natives also seemed to be very straightforward when it came to discrimination. My friends told me the local girls were under a lot of pressure to date and marry Jewish guys, the few Italians in the area hated me, and I was warned not to get off public transport in a Puerto Rican or black neighborhood. Other than that things were fine.

Donald Trump makes a lot of good points. Inmigrants do take jobs. Illegal immigrants tend to take lower paying jobs, hurt the local poor and benefit the rich who want cheap labor. But the guy is also creating a pretty ugly atmosphere.

I have a daughter born in Texas, smart as a whip, two college degrees and very gainfully employed. Speaks several languages, including Mandarin (she spent time teaching in a Chinese university). But she looks just like my sister, and has to face redneck pinhead hostility because they think she just came over the border.

An excellent article, FM, although it was a bit hard to follow because you were going against the conventional grain and I had to keep thinking “what was that I just read? What does it mean?”

I had not understood the basis of complaints against illegal immigrant workers until I saw your charts, now it is perfectly self-evident and I agree with you, no matter which party takes the White House, there is going to be a crackdown on immigration.

There is one aspect to extremely low education foreign born jobs that you did not cover. The jobs such as working in the fields, that very few native born people would take because the jobs pay very little and the working conditions are harsh. If we were somehow able to send all of the foreign born workers in those jobs away, the jobs would evaporate because the owner’s profit margins could not survive raising the wages enough to attract native born people. Instead the owners would find some way to mechanize the jobs per your excellent articles on the robot revolution. But I suspect that this is not self-evident to the general population.

As you’ve noted before, we are reaching a huge and difficult transition in economics. For those people who do not follow Fabius Maximus as closely as I do; currently economics assumes that one worker equals at least one consumer and that the economy can only grow by increasing population or increasing worker efficiency. What happens when production can grow by an almost unlimited amount with very few workers? Who can afford to by the goods produced?

I foresee many Nobel prizes handed out (and a lot of awful ideas that are used extensively but do not work) before we get to that solution.

“There is one aspect to extremely low education foreign born jobs that you did not cover.”

There are a thousand and one aspects I didn’t cover. A thousand words is the standard length of posts here, a compromise between the need for adequate analysis and losing audience. A tea cup cannot hold the ocean.

“The jobs such as working in the fields, that very few native born people would take because the jobs pay very little and the working conditions are harsh.”

What fraction is that of the jobs held by immigrants? Small or very small.

FM: “What fraction is that of the jobs held by immigrants? Small or very small.”

Speaking strictly about agricultural workers (which is what I meant when I said “workers in the fields” but it occurs to me that I might not have been clear), estimates range from 53% are illegal immigrants (Dept of Labor) to 78% (National Farm Workers Association). Estimates are around 2.5 million workers overall.

You are right that those jobs are not a large percentage of the entire US workforce but we are better off at the moment paying for humans than we would be if robots replace even the lowest paid migrant workers.

I agree. Immigrants as farm laborers are very old and largely accepted aspect of the US economy, neither culturally nor economically threatening to many Americans. Hence of negligible political significance in this large — and growing — debate.

One of the graphs shows that today’s market hires the uneducated faster than the educated. So I’d say that means educated job-seekers are not valuable enough, and we should invest in improving their quality.

That’s possible, but IMO unlikely. More plausible is that we have a surplus of educated people. This is confirmed by their lack of wage growth. Look at STEM workers: supposedly in a great shortage, but their wages are not growing unusually fast.

The sectors where returns to education are growing are those largely shielded from foreign competition — and hence probably largely reflect ability to extract “rents” from the economy. Medicine, finance, etc.

This was an excellent post. If Trump’s campaign is smart they will use these statistics in the debates or ads. (I had no idea things were this bad.)
As far as EDUCATION goes, peteybee should look at the H1-B post that FM has highlighted. Personally, despite having three degrees from top schools, I have not even had an interview during the past 3 yrs.
The third head of cerberus (after immigration and H1-B) is simply moving whole factories. The Oreo factory on the SW side of Chicago was moved to Mexico recently, for a loss of 6000 solid manufacturing jobs.

Yes, that’s a good point. The H1B situation really screws up the labor-relations, in favor of employers. Still, for that to happen, someone made the argument that employees with such-and-such a skill set are scarce in the US. If that was false, do you blame the industry or the people they hire?

the problem with severe limits on immigration are the existing demographic trends in the oecd. absent in-migration, many of the wealthy nations of the world are already in contraction. the effect on debt service, pension plans, social security and other age based income transfers is self evident. and, as the ongoing mess in the eu demonstrates, immigrants are coming and the idea that any country can fortify its borders adequately to stop them is plainly wrong. much better to manage the flow in some thoughtful way than spit into the wind.

I agree about the slowdown in population growth. Yes, that is the conventional analysis. However, I disagree absolutely. Although the transitional period will be difficult, stable or falling population is wonderful. First, slowing population growth — eventually perhaps falling populations — is the most effective and reliable solution to our ecological problems. An Earth with a far smaller population could be a garden even with everybody at a US-average level of income. A world with a larger population seems unlikely to support a fully industrial civilization without severe problems.

Second, the next industrial revolution has begun — probably creating massive loss of jobs. A falling working age population solves that problem, and the increased productivity of new tech provides a means to support the growing ranks of the elderly. Also, smaller populations reduce our burden on the environment. For more about this see Must our population always grow to ensure prosperity?

A buddy of mine bakes bread. A lot of bread. He recently told me the immigrants he hires work twice as hard as native born. He also said we could stop the tide of immigration cold if we simply enforced current requirements that employers check to make sure new hires are in the data base of legal hires. No wall needed. He does. His point was that legal immigrants are twice the value of native borns. The dirty secret is our native citizens resent the competition and work ethic of any immigrant. Legal or illegal. Hard to defend but very true.

dear editor: i agree, it would be wonderful if world population dropped, but it won’t, at least not anytime soon. the u.n. just raised it’s estimate of end of century population to 12 billion. the question is not whether the population will grow over the next 100 years; that’s baked in. the question is where will they live?
as to the eco-benefits of reduced population, that’s entirely dependent on the environmental footprint of each of those people.

I was responding to your comment: “the problem with severe limits on immigration are the existing demographic trends in the oecd. absent in-migration, many of the wealthy nations of the world are already in contraction”. I pointed out that this is a good thing, not a bad thing (despite the stress created by the transition).

“benefits of reduced population, that’s entirely dependent on the footprint of each”

I don’t understand your point. Fewer people have smaller footprint than more, all other things being equal.

my point relative to “footprints” is simple: a person scratching out a living on a subsistence farm in africa consumes far less resources than the average westerner. not only is population growing but the growing population wants the same lifestyle that u.s. citizens and europeans have. china became the top producer of carbon not simply because of population growth but because of the growth of its car driving, air conditioning, import consuming middle class.

So encouraging migration to OECD countries by people in search of “opportunity” addresses YOUR point how, exactly? If the Iraqi doctor moves to Europe, doesn’t he expect to consume and pollute at western levels?